The Yahoo Search Split
I bet not many of you knew, Yahoo inc. and Yahoo Japan are actually separate companies, and after all, why would you? Yahoo Inc. has a 32% stake in Yahoo Japan, but it is majority owned by a company called Softbank, a Japanese media company. You may have also heard about the new deal between Yahoo and Microsoft, with Bing to power Yahoo search results. This deal was struck between Yahoo Inc. (not Japan) and Microsoft.
It was with some surprise then that a preliminary deal between Google and Yahoo Japan was announced recently.
This deal, which has so far gained preliminary approval from Japanese authorities, has also brought a backlash from Microsoft, with allegations of monopolies. Microsoft say that it’s an anti competitive move that will hurt online search and advertising customers in the Pacific Rim nation. Microsoft general counsel Dave Heiner said in a blog post:
The proposed deal will eliminate search competition in Japan—in paid advertising and natural search results. The two main search advertising platforms in Japan are run by Google and Yahoo Japan, Google plans to replace Yahoo Japan’s search advertising platform with its own, reducing the number of ad platforms in Japan to just one
It does seem he may have a point, as the combined market shares of the company would total 98%! However, as the companies will continue to operate as independent entities, Japanese fair trade commissions seem to be fine with it.
It does also seem pretty hypocritical to call for an antitrust review, when your own company constitutes one of the largest monopolies itself. Microsoft aggressively push vendors to pre-install their software (ever seen a computer come with Linux?), advertise for them (we recommend Windows 7 etc), and run office (instead of the free OpenOffice.org). It even made Dell change a page on it’s website recently because they ‘dared’ to claim that Ubuntu (excellent FREE OS) was more secure than Windows.
So is it just a case of Microsoft throwing it’s toys out of the pram? Probably, yes, but it means they’re going to be watching this deal like hawks and looking for any way to break it down. However, they should be a little cautious about crying ‘monopoly’; it’s been around before but it can certainly come back and get them again…